Borrowers with a credit score of 700 and above have a higher chance of getting their loan and credit card applications approved by banks, according to a study by Credit Information Bureau (India) Ltd (CIBIL).

This, the study said, indicated that the CIBIL TransUnion score has become an integral risk assessment tool for banks and financial institutions for sanctioning any new credit, Harshala Chandorkar, Senior Vice-President, Consumer Relations and Communication, CIBIL, told presspersons here today.

Credit grantors increasingly relied on CIBIL’s services to make objective, faster and prudent lending decisions, she said, adding that many industry leaders also attributed the decline in defaults and improvement in asset quality to the information support received from CIBIL.

To prove her point, Harshala said usage of credit information has tamed the NPA rate, which was around 1.9 per cent in 2010 to under 1.3 per cent in 2013 and there was an almost 30 per cent reduction in NPA rates over the last four years.

About 80 per cent of the credit active population has a CIBIL TransUnion score greater that 750, which indicates that banks are increasingly lending to borrowers with higher CIBIL, she said.

There was a more than 200 per cent increase in credit applications over the last three years, Harshala said and added without revealing the numbers that the highest growth was witnessed in the personal loans and two-wheelers segments, followed by home loans over the last five years.

Maharashtra, Andhra Pradesh, Karnataka, Uttar Pradesh and Tamil Nadu contributed to almost 50 per cent of all enquiries for credit, Harshala said.

Related Topics